COMMERCE 3AC3 Midterm: Midterm Review
3 Jun 2016
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Cash (or accounts receivable) (200,000 x . 50) 700,000. 45,000 10 = 4,500 sh. 90 = ,050. In each box of cereal that it produces, crackle cereal corp. includes a special coupon. The purchaser may redeem 10 coupons for a cheese grater (premium). During 2014, crackle purchased 6,000 graters and sold 200,000 boxes of cereal @ . 50 per box. Based on past experience, crackle estimates that 60% of the coupons will be redeemed. During 2014, 45,000 coupons were presented for redemption. As well, crackle sold 300,000 boxes of cereal at. . 75 per box, and 90,000 coupons were presented for redemption. Prepare all the journal entries that would be made regarding the cereal sales and the premium plan in both 2014 and 2015. Note total expense for year = 120,000 10 = 12,000 x sh. 90 = ,800 (,050 + ,750) Estimated liability for premiums (balance from 2014) 7,500 x sh. 90. 120,000 45,000 redeemed = 75,000 10 = 7,500 to be redeemed in 2015.
